San Beda College Alabang

Alabang Hills Village Alabang, Muntinlupa City

Integrated Basic Education (High School)

Handout Case Problems in Taxation Name: Section:

That In All Things, God May Be Glorified

Date: Teacher:

Case/Situation

Compensable Amount

Explanation/Calculation Basic salary is multiplied by 12 months. Only the excess of P30,000 of the 13th month pay is taxable. Taxable Amounts: = P45,000 x 12 months = P540,000 (annual salary) = P45,000 P30,000 = P15,000 (13th month pay) = P540,000 + P15,000 = P555,000 Basic salary is multiplied by 12 months. All overtime pay is compensable. Overtime pay is calculated per hour, multiplied by the total number of hours per year times 125%. Taxable amounts: = P18,000 x 12 months = P216,000 (annual salary) = P93.75 x 12 hrs per mo. x 3 mos. x 125% = P4,218.75 (overtime)

Employee s basic salary is P45,000. His 13th month pay is equal to his basic salary. What is his annual compensable income?

P555,000

Employee s basic salary is P18,000. The number of working days in a month in his job is 24. He worked 12 hours of overtime per month for three months in a year. What is his annual compensable income?

P220,218.75 Calculation of hourly rate: = monthly salary / 24 days per month / 8 hours per day = P18,000 / 24 / 8 = P93.75/hour = P216,000 + P4,218.75 = P220,218.75 Birthday gift above P5,000 is non-taxable; get the excess of P5,000. 13th month pay and merit pay total of P30,000 is not taxable; get the excess of P30,000. Rice allowance of P1,500 per month is a de minimis benefit; get the excess of P1,500. Taxable amounts: = P6,000 P 5,000 = P1,000 (birthday cash gift) = (P20,000 + P15,000) P30,000 = P5,000 (13th month & merit) = (P1,800 P1,500) x 12 months = P3,600 (rice subsidy/year) = P1,000 + P5,000 + P3,600 = P9,600 Basic salary is multiplied by 12 months. E-COLA is fully taxable. 10 days of sick leave credits is non-taxable; get the excess of 10 days. 13th month pay and merit pay total of P30,000 is not taxable; get the excess of P30,000. Taxable amounts: = P20,000 x 12 months = P240,000 (annual salary) = P500 x 12 months = P6,000 (E-COLA) = (P20,000 + P10,000) P30,000 = 0 (therefore, non-taxable) = (15 days 10 days) x daily rate = 5 x P833.33 = P4,166.65 Calculation of Daily Rate: = P20,000 basic salary / 24 days in a month = P833.33 = P240,000 + P6,000 + P4,166.65 = P250,166.65 Basic salary is multiplied by 12 months. All overtime pay is compensable. Overtime pay is calculated per hour, multiplied by the total number of hours per year. Burial aid is NON-taxable. Regular non-working holiday pay is 200% of daily rate. Taxable Amounts: = P15,000 x 12 months = P180,000 (annual salary) = 64 hours x P78.125 hourly rate x 125% = P6,250 (overtime) = 2 days x P625 daily rate x 200% = P2,500 (2 holidays pay) = P180,000 + P6,250 + P2,500 = P188,750

Employee received the following in a year: Birthday Cash Gift of P6,000 Rice subsidy of P1,800 per month 13th month pay of P20,000 Merit pay of P15,000 How much is his compensable income? Employee s basic salary is P20,000. He received the following in a year: E-COLA of P500 per month 15 days of sick leave credits converted to cash 13th month pay equal to his basic salary Merit pay of 50% of his monthly salary There are 24 working days in a month. How much is his annual compensable income? Employee s basic salary is P15,000. He worked overtime for 16 hours a month in a span of 4 months. In addition, he is asked to go to work for 2 regular holidays (Holy Thursday and Good Friday). He received a burial aid of P35,000 for the death of his son. What is his annual compensable income?

P9,600

P250,166.65

P188,750